Gaming and Leisure Buys Meadows Racetrack, Casino in Washington, Pennsylvania for $465M

Gaming and Leisure Properties, a REIT that spun off from Penn National Gaming late last year, has acquired The Meadows Racetrack and Casino in eastern Pennsylvania for $465 million from Las Vegas-based Cannery Casino Resorts.

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Gaming and Leisure Properties, Inc., a REIT that spun off from Penn National Gaming late last year, has acquired The Meadows Racetrack and Casino in eastern Pennsylvania for $465 million from Las Vegas-based Cannery Casino Resorts, L.L.C.

The 180,000-square-foot casino has 3,317 slot machines, 61 table games and 14 poker tables. The property includes 11 casual and fine-dining restaurants, bars and lounges, a 24-lane bowling alley and a 5/8 mile racetrack with a 500-seat grandstand. GLPI said in a release it is seeking a third-party operator for the property. The company would retain ownership of the land and buildings and sell the entities that hold the licenses and operating assets.

GLPI plans to pay for the property located in the Pittsburgh suburb of Washington, Penn., with a combination of equity and debt. The REIT said the purchase price “reflects the expected stability of market competition and the robust local economy resulting from Marcellus Shale-related industry.”

The deal, which requires approval from the Pennsylvania Gaming Control Board and the Pennsylvania Racing Commission, is expected to close in 2015.

“The acquisition of The Meadows represents another step in the execution of our strategy to grow our company into the leading owner of high-quality assets in key regional gaming markets,” Peter Carlino, chairman & CEO of GLPI, said in the news release. “This acquisition is a prime example of how we are uniquely able to tailor transactions to suit the specific needs of the sellers. We look forward to partnering with one of the many quality operators in the gaming industry and believe that this acquisition creates meaningful additional value for our shareholders.”

Cannery Casino Resorts said it would use the proceeds from the sale to pay down debt.

“This is a terrific deal for CCR, and a great outcome for our employees, partners and customers at The Meadows,” William Paulos, Co-CEO of Cannery Casino Resorts, said in the release.

Stifel served as financial advisor to Cannery Casino Resorts on the transaction.

Last year, Cannery Casino Resorts sold a four-acre parcel to Meadows Hotel Associates L.L.C., a privately owned hotel development firm in Pittsburgh, which is building a 154-room Hyatt Place hotel adjacent to The Meadows. The project, expected to open in 2015, will feature a pedestrian bridge connecting the hotel to the casino and raceway. A new third-party retail center is also planned for the property and there is space available for an indoor event venue to be built.

The Meadows is the second property GLPI has acquired since it spun off from Penn National Gaming in November to become a gaming-focused REIT. In January, GLPI bought the Casino Queen in East St. Louis, Ill., for $140 million in a triple net sale-leaseback deal. The 208,000-square-foot gaming facility was owned by its employees. It has more than 1,180 slot machines and 22 table games.

Wyomissing, Penn.-based Penn National Gaming owns, operates or has ownership interests in 27 gaming and racing facilities in 18 locations throughout the United States. At the time of the November spin-off, GLPI owned the real estate associated with 21 casinos, including two facilities being developed in Dayton and Youngstown, Ohio. Nineteen of those facilities were leased to Penn National Gaming. The remaining two, in Baton Rouge, La., and Perryville, Md., are owned and operated by subsidiaries of GLPI.